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U.S. PIRG Consumer Blog
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November 18, 2006
Around the consumer blogs:
 There's a lot happening at consumer blogs around the blogosphere: Over at the Consumer Law and Policy mega-blog: Ira Rheingold of NACA comments on Senator Tim Johnson's (D-SD) recent disparaging comments in the trade paper American Banker, where Johnson attempts to scare fellow Senators into backing a bank-friendly, consumer unfriendly "fix" to landmark legislation signed by the President this fall banning predatory lending to our military families. The Senator has also made disappointing comments this year that he was disappointed that the Senate hadn't yet rolled back strong state laws in a few courageous states (New Jersey, Vermont, Minnesota, Wisconsin and North Carolina) that still protect all their consumers from predatory rent to own stores.
Still at the Consumer Law and Policy mega-blog, see a post by Deepak Gupta of Public Citizen on credit card debt and the recent showing of the forthcoming documentary Maxed Out at the NCLC conference in Miami last weekend. Some of the most powerful performances in the movie are by people you've never heard of, including Janne O'Donnell. At the conference, I had the privilege of renewing my acquaintance with Janne, who has couragously spoken out against credit card company practices since 1998, when her son, college student Sean Moyer, committed suicide while distraught over looming credit card debts. (PIRG truthaboutcredit.org site.) At her Washington Post blog The Checkout, here's reporter Annys Shin with a post on Mastercard's new product: plastic for kids as young as ten years old. It's a reloadable debit card ("starter" plastic) with parental controls, and it comes loaded up with fees. "Get 'em young, just like the tobacco industry does," appears to be the credit card industry's mantra. At his Digital Destiny blog, our colleague Jeff Chester of Center for Digital Democracy has a followup entry commenting on some of the issues surrounding our joint CDD-U.S. PIRG complaint to the FTC about out-of-control online advertising. Michele Jun of Consumers Union's Financialprivacynow.org campaign comments on a recent AARP survey showing that people voted for the privacy candidate 80% of the time. Over at the Credit Slips blog, Bob Lawless has a short but provocative piece about being mistakenly-on-purpose over-charged by his health provider $50 bucks for his kids' absolutely-should-be-covered eye exams and asks: "How much do these companies earn by taking aggressive positions with the expectation the consumer will just give up over a small dollar amount? It's only $50 to us, but when the companies take thousands of aggressive positions with thousands of customers, it adds up to real money for them." It's a great point Bob makes and I'd like to see more academic analysis on how HMOs, banks, cell phone companies and others use various techniques to guarantee the "stickiness" of their customers and prevent them from shopping around for better choices. Once we're trapped, they squeeze us for fees because they can. Banks absolutely count on this effect, knowing that hassle of switching accounts may outweigh the "small" fees, which then add up. It works even better (for them) if they make it harder to avoid the fees. See, for example, our work on how cell phone early termination fees allow the companies to offer everything but world-class service, once they have you locked in a cell.
consumer scams, credit cards, health insurance, fees, nickeled and dimed, broadband, privacy, bank fees, predatory loans, payday loans, military families, rent-to-own
Posted by Ed Mierzwinski at November 18, 2006 08:10 AM
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